NetSol Technologies, Inc. (NTWK)

NetSol Technologies, Inc., a worldwide provider of global business services and enterprise application solutions, leverages its BestShoring(TM) practices and highly experienced resources to deliver high-quality, cost-effective solutions. Their suite of products and services include credit and finance portfolio management systems, hospital/healthcare information management systems (HIMS), SAP consulting and services, custom development, systems integration, and technical services.

Serving the global financial, healthcare, insurance, energy, and technology markets, NetSol has operations, offices, and joint ventures in Adelaide, Bangkok, Beijing, Lahore, London, Riyadh, San Francisco, and San Pedro Sula. NetSol Technologies’ clients include Fortune 500 manufacturers, global automakers, financial institutions, utilities, technology providers, and government agencies.

During the economic downturn, Netsol reduced costs and pursued strategic relationships, both of which have been accomplished, providing the company with meaningful operating leverage as the economy rebounds. The results of management’s efforts are clearly evident in the company’s most recently reported financial results. The company announced sequential revenue growth of 11% and sequential EBITDA growth of 117%.

Analysts are very supportive of the company with an average price target of $2.50. Rodman & Renshaw recently raised their estimates, expecting the company to report revenues of $31.5mm and $40.1mm for FY10 and FY11, versus prior estimates of $29.4mm and $33.4mm. Maxim Group has also raised their estimates forecasting FY10 EBITDA of $6.7M, reflecting a margin of 21.3%.

Netsol is well positioned with its core product offerings as it continues to expand into new international market opportunities. Looking forward, the company is very optimistic of its short-term and long-term outlook as it sees strong growth in Asia Pacific as well as the South East Asian markets, while also envisioning unlimited potential for its niche solutions and services in the Americas.

Key statistics (7/26/10):

Market cap: $30.4 Million
P/S Ratio: 0.87 versus industry average of 5.07
Price/Book Value: 0.85 versus industry average of 4.60
5-Year Sales Growth: 77.80% versus industry average of 24.50%

Debt/Equity Ratio: 0.56 versus industry average of 0.26
Current Ratio: 1.6 versus industry average of 3.6
Quick Ratio: 1.2 versus industry average of 3.6
Assets/Liabilities: $69.4 Million versus $26.9 Million

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